Office Depot 2011 Annual Report Download - page 18

and equitable relief. The allegations made in this lawsuit primarily relate to the company’s previous financial
disclosures and reports regarding the certain tax losses described below. The lawsuit was filed in the United
States District Court for the Southern District of Florida captioned as Climo v. Office Depot, Inc, Steve Odland,
Michael D. Newman and Neil R. Austrian. The Court granted a request by the Central Laborers’ Pension Fund
(“CLPF”) to appoint it as lead plaintiff in the case and the CLPF filed its amended complaint on September 6,
2011. The company filed a motion to dismiss the Complaint November 7, 2011, plaintiff’s opposition to the
motion to dismiss was filed on January 7, 2012, and the company’s reply was filed on February 7, 2012. Pursuant
to Court Order, all discovery is stayed pending a decision on the motion to dismiss.
On June 17, 2011, a derivative lawsuit was filed against certain current and former executive officers and the
company, generally alleging that the officers breached their fiduciary duties. The allegations in this lawsuit
primarily relate to the company’s previous financial disclosures and reports regarding the certain tax losses
described below. The derivative lawsuit was filed in the United States District Court for the Southern District of
Florida captioned as Long v. Steve Odland, Michael D. Newman and Neil R. Austrian, defendants, and Office
Depot, Inc., nominal defendant. The Special Litigation Committee (“SLC”), which was appointed by the
company’s Board of Directors to review the allegations, issued its report on January 9, 2012. As set forth in the
report, the SLC determined that the claims alleged in the Complaint should be dismissed. Accordingly, the
company intends to file a motion to dismiss the Complaint at the appropriate time.
The allegations made in the above lawsuits primarily relate to the company’s previous financial disclosures and
reports regarding certain tax losses. On March 31, 2011, Office Depot announced that the Internal Revenue
Service had denied the company’s claim to carry back certain tax losses to prior tax years under economic
stimulus-based tax legislation enacted in 2009. As a result, on April 6, 2011, the company restated its financial
results to revise the accounting treatment regarding its original tax position. The periods covered by the
restatement are the fiscal year ended December 25, 2010 and each of the quarters ended June 26, 2010 and
September 25, 2010.
In addition, in the ordinary course of business, our sales to and transactions with government customers may be
subject to investigations, audits and review by governmental authorities and regulatory agencies, with which we
cooperate. Many of these investigations, audits and reviews are resolved without incident. While claims in these
matters may at times assert large demands, we do not believe that contingent liabilities related to these matters,
either individually or in the aggregate, will materially affect our financial position, results of our operations or
cash flows. Among such matters, during the first quarter of 2011, we were notified that the United States
Department of Justice (“DOJ”) commenced an investigation into certain pricing practices related to an expired
agreement that was in place between January 2, 2006 and January 1, 2011, pursuant to which state, local and
non-profit agencies could purchase office supplies. We are cooperating with the DOJ on this investigation.
Item 4. Mine Safety Disclosures.
None.
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